06/12/2012 06:10 EDT | Updated 08/12/2012 05:12 EDT

Ship contracts not in danger, top soldier says

Defence spending is under review across the country, but the chief of defence staff says national shipbuilding contracts shouldn’t be affected.

"We’ve done everything possible to safeguard our capital programs," Gen. Walter Natynczyk told a national convention of veterans in Halifax.

He said the navy is his greatest concern, when it comes to modernizing the military. The country’s supply ships and destroyers are more than 40 years old, and are in need of replacing. Arctic offshore patrol ships are the first vessels scheduled to be built under the new contracts. He says they are a key part of Canada's maritime security.

Natynczyk said it’s "time to start cutting steel" on the new fleet of ships.

The federal government selected the Irving family's Halifax Shipyard as the big winner in last year's national shipbuilding procurement strategy.

Defence analysts have suggested that the shipbuilding contracts could face the same cuts as other federal government budgets have recently.

It’s been seven months since Halifax Shipyard won the right to build the ships, but the company has been unable to settle on a contract with the Defence Department yet.

Nova Scotia Premier Darrell Dexter says that delay doesn't concern him.

"It is a complex process, many moving parts. It takes a lot of planning in terms of what the navy wants to receive, what the Coast Guard wants to receive as product, and how the yard can accomplish that," he said.

"I'm certain that if Irving Shipyards could have their way, they would like to be cutting steel right now, but it’s still a process they have to get through."

An Irving spokesperson issued an email saying the shipyard is "fully focused" on getting the first contracts signed.

Pat Brannon, a policy analyst with the Atlantic Provinces Economic Council, said the target for starting to build the ships has shifted.

"It's been bumped back a little bit. In early stages of talking about the contract, there was an outlook of about 2013 for cutting steel, but apparently that’s moved back to about 2015."